Sugar sells Amstrad to BSkyB for £125m

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Sir Alan Sugar has agreed to sell the consumer electronics company he founded nearly 40 years ago to BSkyB for £125m. Announcing the sale of Amstrad to Sky, Sugar said: "I cannot imagine a better home for the Amstrad business and its talented people. Our companies share the entrepreneurial spirit of bringing innovation to the largest number of customers. Sky is a great British success story. I'm proud to have worked so closely with it, and I look forward to continuing to play a part in this exciting business."

Amstrad developed early mass market satellite receivers for Sky in the late 1980s, and then supplied the pay-TV giant's first digital set-top boxes in 1997. Sky CEO James Murdoch said: "Sky and Amstrad have had a long and positive relationship. The acquisition accelerates supply chain improvement and will help us to drive innovation and efficiency for the benefit of our customers."

In a joint statement to the City, the boards of Sky and Amstrad said the recommended cash offer of 150p for each Amstrad share represented a premium of 23.7% on Monday's closing share price.

In the year to June Amstrad supplied around 30% of Sky's set-top boxes; Sky said it believed it accounted for around 75% of Amstrad's revenues. Amstrad's other large customer is BSkyB's Italian counterpart, Sky Italia.

"The acquisition of Amstrad will provide Sky with an in-house design and development capability, which Sky believes will deliver significant operational and financial benefits and enable the Sky Group to source some of its products directly from specialist electronics manufacturers," said Sky.

Sugar is the majority shareholder in Amstrad, but the deal still requires the approval of Amstrad's remaining shareholders.